Manage Your Business
Worksheet: Do you know who your customer really is?
Get a better understanding of your target market
Even your best business ideas won't succeed unless you understand your target customers and shape your offerings to attract them. Answer the following questions to better know how to refine your product or service, set your pricing, craft your messaging and determine the best channels to reach them.
1. What problem does my offering solve? Identifying the need your product or service will fill is an essential first step. For example, if you plan to start a personal chef service that focuses on organic ingredients, it could meet a need for busy professionals who want healthier meals to lose weight. Or, you could be offering families an affordable alternative to buying prepared food. Being clear about the need you solve will inform what you offer and to whom you sell it.
2. Who are my target prospects? Build profiles of your target customers, including demographics, firmographics (business demographics), priorities, habits and plans. Study market research, such as consumer surveys, industry reports and buyer demographics by product or service—your local library may have many of these. Write down the following key characteristics of your potential target groups:
- Age, gender, geographic area, household makeup and other demographic information
- Purchasing decision factors, such as price, quality or convenience
3. What can I learn from my target prospects? Talk to your potential customers to learn more about their habits, needs and opinions. Ask friends and family to refer you to people who may match your target customers' profiles. You might also try striking up friendly conversations in the places your prospects are likely to be. For example, if you're developing a new running watch, ask a few runners at your gym about their preferences. Answer these questions:
- Is the problem you've identified truly a pain point for this group? Are there related pain points that they're experiencing?
- How do they currently address these challenges? Which specific products or services are they using to do so?
- How much do they now pay for these solutions, or how much are they willing to pay to resolve the problem?
- How do they typically shop and pay for purchases? Do they prefer to make mobile payments, shop online, or use payment apps like Chase Pay?
- Where do they learn about these types of offerings?
4. What can I offer that my competitors don't? Carefully assess your competition. Visit their stores and websites, and take notes on their product or service range, their prices, the level of service they provide and other points that are relevant to your offering. See what their customers say on social media and online forums. Use this information to identify what sets your business apart:
- Does your product or service fill additional or complementary needs?
- Do you offer a feature that others do not?
- Will you provide a different level of service?
- Will your price point be higher or lower?
5. What do my target customers think of my concept? Once you've done your research and made any necessary adjustments, ask a group of your target customers for their opinions on a prototype, pictures or detailed description. You could include prospects you've already interviewed, or organize an in-person or online focus group. Ask the following:
- Would you be willing to buy this or try it out?
- What features appeal most to you? Which are least appealing, or seem unnecessary?
- How would you recommend improving it?
At this point, you may determine that your offering is nearly ready for launch, or that your concept still needs refining. Repeat any of the steps above (if needed) to find the right fit. The time and effort you put into this exercise will help strengthen your offering and your overall business plan.
Ami Albernaz writes on technology, finance and small business-related topics.She is a former lifestyle columnist for The Boston Globe and contributor to The Christian Science Monitor.